Product-Market Fit Lost and Found After a 100x Spike
Negative 110% gross margins. Then COVID demand spiked 100x overnight - and nearly killed the company anyway. Pat Kinsel spent years chasing product-market fit while losing money on every transaction. When the pandemic brought 100x growth, most of those customers were urgency buyers who churned when COVID ended. Pat reveals the product-market fit journey behind Proof's rise to nearly $100M ARR - how he used a $0 landing page for market validation before writing code, why 10 years of lobbying across 47 states became a moat competitors cannot replicate, and how losing PMF after COVID forced a complete rebuild around enterprise. You will learn why product-market alignment sometimes has to be found more than once. Pat previously sold his startup to Twitter and spent time in venture capital. Proof (formerly Notarize) has raised $260M and now serves thousands of enterprise customers across identity verification and transaction security. 🔑 Key Lessons 🎯 Validate product-market fit before writing code: Pat built a $0 Unbounce landing page and ran Google Ads to prove people searched for online notary services - measuring acquisition costs and conversion rates first. 📉 Fix unit economics before scale arrives: Proof had negative 110% gross margins, losing money on every transaction. They reached 1% margins just before COVID spiked demand 100x. 🏛️ Turn regulatory complexity into a durable moat: Pat lobbied for 10 years to change laws in 47 states. This red tape became a barrier competitors cannot replicate. ⚠️ Urgency buyers do not equal product-market fit: COVID brought 100x demand, but many customers signed for business continuity, not strategy. When the pandemic ended, they churned. 🚀 Expand TAM by evolving from point solution to platform: Rebranding from Notarize to Proof opened identity verification, fraud prevention, and e-signatures - finding product-market fit again in enterprise transaction security. Chapters Introduction and favorite quote What Proof does and the business of certainty Revenue, team size, and funding ($260M raised) Origin story: The notary error that sparked the idea Validating demand with a landing page and Google Ads The first MVP: A mobile app for online notary Slow early growth: 3 years to product-market fit at $1M ARR Negative 110% gross margins and fixing unit economics COVID hits: 100x demand spike overnight Post-COVID reality: Customers churned when urgency faded Rebranding from Notarize to Proof Lightning round Resources Full show notes: https://saasclub.io/452 Join 5,000+ SaaS founders: https://saasclub.io/email